Dividends are DEFINITELY Back! April 2021 Brings Roaring Dividends

Dividend investing community, I had to write this article.  The blood or “dividends” are pumping through my veins.  Dividend aristocrats are increasing their dividend and beating expectations.  In addition, companies are increasing dividends that I would not have seen coming.

Therefore, this bodes the response to this question, “Are dividends back”?  It’s a question I continually have been asking over the last 6 months.  April 2021 has definitely answered the question full well – DIVIDENDS are.. DEFINITELY BACK!

This article will go over the increases that have propelled me to that conclusion.  Not only the dividend increases in April 2021 that led me to that, but why the dividend increases were different than anticipated.  Let’s GO and dive in dividend investors!

The dividend increases

There have been dividend increases left and right this month of April 2021.  As Bert had showed in his April 2021 expected dividend increase article, this could arguably be the best month as a dividend investor.

We showcased names such as Costco (COST), Johnson & Johnson (JNJ), Procter & Gamble (PG) and Traveler’s (TRV).  Guess what – all have ALREADY increased their dividend.

Here is each company’s headline:

Johnson & Johnson (JNJ) increased their dividend 5%!  Not only are they facing backlash from their minor/but serious blood clotting from their COVID-19 vaccine, we are still in a pandemic, folks.  However, this TOP 5 Foundation Dividend stock stayed relentless, brushed their shoulders off from the coronavirus and STILL sent a 5% dividend increase to the shareholders.

Procter & Gamble (PG) also BLEW expectations out of the water and announced an insanely large dividend increase!  We are talking DOUBLE DIGITS for PG BABY!  I haven’t seen this in SUCH a long time from this consumer goods giant.  Procter & Gamble’s 5 year dividend growth rate was trending well below 5% and going for a massive 10% increase had to beat the majority expectations.  Procter & Gamble is also a dividend king and may start giving Johnson & Johnson a run for it’s money, as the top dividend aristocrat stock.

Costco Wholesale Corp. (CORP) came in BIG and ON TARGET with their dividend increase.  Honestly, I wasn’t sure what to anticipate with Costco, given their retail presence.  We know Walmart (WMT) chips in a smudge of an increase, Target’s (TGT) is usually semi-okay and that leads your expectations to slightly be confused.  Costco, though, said we are consistent.  We may have given a $10 special dividend last year, but we will still present an incredible dividend increase this year.  I’m not a shareholder, but definitely another STRONG sign that dividends are roaring right now this April.

Whirlpool (WHR), yes you read that name right, increased their dividend a massive 12%!  This shows quite a few points regarding dividends come 2021.  First, the housing market and the economy are both doing well.  Americans were performing many DIY projects at their house, renovating that kitchen or laundry room, due to being at home much more than ever before.  In addition, the housing boom is happening, and valuations (at least to me) are getting out of control, again (cough, 2008-2010, cough).  What do renovated homes and new house sales typically require/demand?

Appliances.  Whirlpool has stood to benefit from these booms by selling all of their kitchen and laundry room appliances, such as refrigerators, stoves/ovens, microwaves, dishwashers, dryers, etc..  In fact, take note of Whirlpool.  Why?  Their dividend payout ratio is below 30%, yield is well above 2% AND they are going on 10+ years of consecutively increasing their dividend.

What these dividend increases mean for 2021

What’s the takeaway from me showcasing 4 big dividend announcements above?

First, the economy is doing “OK”.  The public is flush with cash and cash is moving to corporations, due to spending.

Second, confidence is HIGH.  The management team and boards would not be increasing their dividend by the strong rates that we have seen above, unless the confidence in the budgeted and forecasts numbers were better than satisfactory.  Companies understand what is now needed to combat and endure a global pandemic.  Some companies even discovered how well they do during such a time, as well!

Third, expectations are STILL hard to set for 2021.  I am not going to lie, not one increase above I would have expected.  The closest one I could argue would have been Johnson & Johnson (JNJ) or Costco (COST).  However, I would have said less for Costco.  Therefore, expectations should be taken for a few grains of salt this year, relating to dividend increases.  I have been more pleasantly surprised, than not, lately!  That is a GREAT thing for being a dividend investor.

Lastly, 2021 could be a great comeback year for dividend investors.  This started back on the tail end of 2020, when retail and even oil were increasing their dividend or reinstating their dividend to pre-pandemic levels.

Conclusion

2021 is solidifying, yet again, how great it is to be a dividend investor.  I know I have fared very well compared to many other investors and, for the most part (luckily), dividend cuts really stopped mid-way through 2020 and I have not experienced many (if any), since.

Dividends are back and I know there are many other macro-economic events at play.  Events such as potentially more/a fourth round of economic stimulus, more data regarding the COVID-19 vaccines from Pfizer, Moderna and Johnson & Johnson and not to mention potential changes to corporation tax rates.

One thing has stood true during the pandemic and even moreso in 2021.  I am damn happy that I am a dividend investor and I hope that YOU feel the same way.

Guess what… we aren’t even finished with April 2021 yet and I KNOW there will be MORE dividend increases to boot, as we talked about this in our video.

What is your take as an investor in 2021?  Do you see continually strong dividend increases?  Do you feel that this provided you more confidence, clarity and less risk as a dividend investor?  Please share your comments and feedback below, as I cannot wait to read your perspective!

As always, good luck and happy investing everyone!

-Lanny

7 thoughts on “Dividends are DEFINITELY Back! April 2021 Brings Roaring Dividends

  1. JNJ’s increase was a bit below my expectations, but it was nevertheless a decent increase. SO came in at my expectations and I’m awaiting an increase from IBM. Let’s hope it’s much better than last year!

  2. Hi Lanny
    Yeah, dividends are definitively back. My portfolios are heavily in European stocks and here I‘ve seen a whole lot of cuts, postponements and dividend eliminations. Happy that 2021 is stabilizing in terms of passive income.
    Cheers

    • F-Shaper –

      Exactly. Stabilization is here. I am getting shocked each and every week – whether it’s an industry doing better than expected or even a dividend bigger than anticipated. All positive!

      -Lanny

  3. Guess I’ll be the pessimist in the room, or at least less optimistic than your headline. For each of your examples, I can cite others like 3M’s 0.68%, KO’s 2.44% or BEN’s 3.7%. The S&P median for 2021 so far is 7.69% which would (imho) be a stretch to be classified as “Roaring”.
    My portfolio’s 5 year DGR is 10.82%. I will admit 2021’s 8.65% (so far) is an improvement over 2020’s 5.35% but still pales in comparison to the double-digit increases booked in prior years.
    Call me cautiously optimistic at this stage while waiting to see how loudly the big banks ‘roar’ once the Fed unleashes them.

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